John Deere 2014 Annual Report Download - page 49

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Unpaid Average
Recorded Principal Specific Recorded
Investment Balance Allowance Investment
2013*
Receivables with
specific allowance** ..... $ 18 $ 18 $ 4 $ 19
Receivables without a
specific allowance*** .... 8 8 8
Total ............................... $ 26 $ 26 $ 4 $ 27
Agriculture and turf ...... $ 23 $ 23 $ 4 $ 24
Construction and
forestry .................... $ 3 $ 3 $ 3
* Finance income recognized was not material.
** Primarily operating loans and retail notes.
*** Primarily retail notes.
A troubled debt restructuring is generally the modification
of debt in which a creditor grants a concession it would not
otherwise consider to a debtor that is experiencing financial
difficulties. These modifications may include a reduction of the
stated interest rate, an extension of the maturity dates, a
reduction of the face amount or maturity amount of the debt,
or a reduction of accrued interest. During 2014, 2013 and
2012, the company identified 66, 92 and 138 financing
receivable contracts, primarily operating loans and retail notes,
as troubled debt restructurings with aggregate balances of
$3 million, $16 million and $5 million pre-modification and
$2 million, $15 million and $4 million post-modification,
respectively. During these same periods, there were no signifi-
cant troubled debt restructurings that subsequently defaulted
and were written off. At October 31, 2014, the company had
no commitments to lend additional funds to borrowers whose
accounts were modified in troubled debt restructurings.
Other Receivables
Other receivables at October 31 consisted of the following in
millions of dollars:
2014 2013
Taxes receivable ........................................................... $ 697 $ 868
Reinsurance receivables ............................................... 502 351
Insurance premium receivables ..................................... 23 24
Other ........................................................................... 278 221
Other receivables ...................................................... $ 1,500 $ 1,464
Reinsurance and insurance premium receivables are
associated with the financial services’ crop insurance subsidiary
(see Note 9).
Revolving
Retail Charge
Notes Accounts Other Total
2012
Allowance:
Beginning of year
balance ........................ $ 130 $ 40 $ 27 $ 197
Provision (credit) ........... (12) 8 3 (1)
Write-offs .................... (8) (30) (4) (42)
Recoveries ................... 10 22 1 33
Translation
adjustments ............. (10) (10)
End of year balance* ......... $ 110 $ 40 $ 27 $ 177
Financing receivables:
End of year balance .......... $ 18,251 $ 2,488 $ 5,215 $ 25,954
Balance individually
evaluated ................. $ 11 $ 1 $ 1 $ 13
* Individual allowances were not significant.
Past-due amounts over 30 days represented .90 percent
and .82 percent of the receivables financed at October 31, 2014
and 2013, respectively. The allowance for credit losses repre-
sented .54 percent and .58 percent of financing receivables
outstanding at October 31, 2014 and 2013, respectively.
In addition, at October 31, 2014 and 2013, the company’s
financial services operations had $196 million and $197 million,
respectively, of deposits withheld from dealers and merchants
available for potential credit losses.
Financing receivables are considered impaired when it is
probable the company will be unable to collect all amounts due
according to the contractual terms. Receivables reviewed for
impairment generally include those that are either past due,
or have provided bankruptcy notification, or require significant
collection efforts. Receivables, which are impaired, are gener-
ally classified as non-performing.
An analysis of the impaired financing receivables at
October 31 follows in millions of dollars:
Unpaid Average
Recorded Principal Specific Recorded
Investment Balance Allowance Investment
2014*
Receivables with
specific allowance*** .... $ 9 $ 9 $ 2 $ 10
Receivables without a
specific allowance*** .... 6 6 7
Total ............................... $ 15 $ 15 $ 2 $ 17
Agriculture and turf ...... $ 12 $ 12 $ 2 $ 13
Construction and
forestry .................... $ 3 $ 3 $ 4
(continued)